Venezuelan Currency Plunges Could Dollar Be Next?LCR Coin, Inc.
Venezuela is nearly broke and it happened in the blink of an eye. Well, it was a bit slower than that, but
it took less than a year for Venezuela’s currency, the Bolivar, to lose 94 percent of its value. The decline
of the Bolivar has been all but unstoppable — yet the Venezuelan government has largely ignored its
In 2014 one U.S. dollar equaled 100 Bolivars, in 2016 it equaled 1,262 Bolivars, today it’s worth 12,163
Bolivars according to DolarToday.com.
Venezuelans are struggling as the value of their money continues to evaporate. Many spend all that they
earn on food, now that a kilo of rice costs 17,000 Bolivars.
One man, an executive for a reinsurance company in Caracas, was complaining about his salary of
800,000 Bolivars per month. On Monday, it was worth $47 but a year ago it was worth $200.
U.S. dollars are nearly as good as Gold in the Venezuelan economy. In fact, economies like Venezuela's,
are the reason Gold is so valuable today.
Gold has an inverse relationship to currencies like the U.S. Dollar and the Bolivar. That means when the
dollar drops in value Gold's value typically rises.
How did a country with more oil reserves than any other country in the world end up in such dire
straits? Politics, of course, but it was triggered by plummeting oil prices.
Policies instituted by President Chavez, before his untimely death, to spread the country's wealth among
the poor, collapsed with the price of oil. So the people rebelled.
Economic decisions made by Chavez’s chosen replacement, President Nicolas Maduro, to continue his
failed policies, have played a role in deepening the crisis.
Crude oil makes up over 95% of Venezuela's revenue. Oil prices were above $100 a barrel in 2014, and
life was good. Today, crude oil prices typically stay below $50 a barrel.
Tumbling oil prices caused the devaluation of the Bolivar which diminished Venezuela's purchasing
power abroad. Countries like Venezuela receive nearly all of their revenue from the sale of oil. So,
Venezuela has no other industry to speak of and must import even its most basic necessities.
The point is, anyone who didn’t buy physical Gold to balance their portfolios is suffering if all of their
wealth is in Bolivars. The same goes for the dollar, if all of your wealth is in dollars and it falls, so does
your wealth. And it can happen with dizzying speed.
Savvy investors who bought physical Gold as insurance on their wealth, will receive around $1,280.00 an
ounce U.S. today for it, anywhere in the world. That's why it's known as a store of value.
Not so with currency. Today, now that the world is off the Gold standard, each currency is backed by its
nation’s promise to pay, nothing more.
There is concern in the U.S. over our growing debt load with investors worried that the dollar will be
devalued. Find out how to protect your future and your retirement with the purchase of physical Gold.
Discover the benefits of a Self-Directed Gold IRA by calling LCR Coin today at (800) 830-5578.